The Ministry of corporate affairs issued a scheme known as Companies fresh start Scheme 2020 (CFSS-2020) condoning the delay in filing of documents with the ROC at a normal fee only and grant immunity from launching of prosecution for imposing penalty on account of delay associated with certain filings.
Details of Companies Fresh Start Scheme, 2020 (CFSS-2020) are as under:
1. Duration of Scheme: The scheme shall come into force w.e.f. 1st April 2020 to 30th September 2020.
2. Applicability: Any Company which has made a default in filing of any documents, statement, returns etc. including annual statutory documents on the MCA-21.
3. Manner of payment of normal fees for filling of belated documents and seeking immunity under the scheme:
a. one-time opportunity to file all the pending documents including the annual filing of the company without charging higher additional fees on any delay.
b. This Scheme provides immunity to companies in relation to prosecution or proceeding for imposing an additional penalty for not filing of belated documents.
c. This Scheme doesn’t provide immunity on any other consequential proceedings including proceeding involving the interest of its directors or key managerial personnel etc.
4. Withdrawal of appeal against any prosecution launched or the proceedings for imposing penalties imposed: If the company appeal against any order of prosecution for penalty passed by the competent court or adjudicating authority then the company first need to withdraw his application of appeal and furnish the proof of withdrawal to avail immunity in this CFSS 2020 scheme.
5. Special measures for cases where the order of the adjudicating authority was passed but the appeal could not be filed: In all cases where, the competent court or adjudicating authority passed an order to prosecute and company or officer didn’t file the appeal before the appellate authority or regional director under section 454(6) of the companies Act, 2013 as on commencement of this Scheme then the following things apply are:-
a. The Company or officers are allowed 120 days to file an appeal before the regional director if the last date of filing appeal falls between 1st March 2020 to 31st May 2020, &
b. During the aforesaid period, No prosecution shall be initiated against the Company or officers for non-compliance of adjudicating authority order under section 454(8) of the companies act, 2013,
6. Application for issue of immunity in respect of documents(s) filed under the scheme:
The company or officer need to file electronically form “CFSS-2020” after closure of scheme and after the documents are taken on record by the ROC but not after the expiry of 6 months without any fees to avail immunity under this scheme except that
a. No immunity shall be given in the matter of any appeal pending before the court of law and in case of pending management disputes before the adjudicating authorities.
b. No immunity shall be given in case any court has ordered conviction in any matter or an order imposing penalty has been passed by an adjudicating authority and no appeal has been preferred against such orders before this scheme has come into force.
7. Non Applicability of CFSS-2020
This scheme shall not apply in the following cases:-
a. To companies against which Final notice for striking off the name of the company under section 248 of the companies act, 2013 already issued by the ROCs;
b. The Companies which has made an application for striking off the name of the company;
c. Amalgamated Companies
d. he company applied for dormant status under section 455 of the companies act, 2013 before the scheme introduction
e. Vanishing Companies;
f. Documents related to Increase in authorised share capital (Form SH-7);
g. Charge related documents (CHG-1, CHG-4, CHG-8 & CHG-9);
8. Scheme for Inactive Companies
The defaulting inactive companies, while filing due documents under CFSS-2020 can simultaneously apply for the following:-
a. Apply to get themselves declared as dormat Company by filing e-form MSC-1 at a normal fee.
b. Apply for striking off the name of the company from ROCs.
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